The Ecosystem of Supply

As flights are cancelled throughout Europe and luggage piles high inside airports, I was fortunate to escape for my first holiday abroad since 2019.  

 Whilst I was away, the managing director of the travel company wrote to all travelling customers explaining that they rely on a complex ecosystem of services. This includes pilots and cabin crew, air traffic control and airport security teams, operational partners who handle check-in, baggage and catering. Their planes cannot take to the skies when this ecosystem collapses.

This week, the hospitality industry alone will lose £540m due to rail and tube strikes. We are held hostage to operational disruption within our own supply chains. Some we can control, or at least mitigate, and some we have no influence over at all.

Global supply chains are becoming increasingly squeezed. China has spent most of this year chasing a zero-Covid policy responsible for closing everything from the production line to the ports. The world’s largest supplier has been closed for business. The invasion of Ukraine has also resulted in a supply squeeze. Sunflower oil and grain are now in short supply, pushing up the price of alternative oils.

Add to that double digit inflation, an inability to honour orders and the need to track Scope 3 emissions. It is increasingly important to think long term. It is time to anticipate increasingly fragile and overly scrutinised supply chains.

We need alternative suppliers in a world with fewer options.

Solutions do exist. In pharmaceuticals, work has begun on more sustainable, temperature-controlled transportation for sensitive drugs. You may remember the need to transport Pfizer Covid-19 vaccines at sub-zero temperatures – an energy-intensive task. In consumer markets, Unilever has turned to blockchain to ensure its palm oil supplies are sustainable. Some suppliers have been forced to reluctantly embrace palm oil again, despite its links to deforestation, following a shortage of seed oils from Ukraine.  

Learn from these examples. You may not be able to simply, suddenly, switch suppliers if your current supplier doesn’t play by your rules.  

Be patient and flexible regarding the short-term economic impacts of the current supply squeeze. But remember to keep your eye on reporting and tech solutions to help avoid future shocks as ecosystems evolve.